How can economic developers use grants to grow local businesses?
The grant partnership playbook, for economic development organizations
By Wesley Stevens, Founder of Quillify. October 3, 2026.
How can economic developers use grants to grow local businesses?
Lead or join the applications that bring outside money into the region, and build the partnerships around local small businesses. When a regional proposal names local firms as consortium members and subcontractors, the money is spent in the region. The firms gain the past performance that wins the next award, and they hire locally. Follow each program's purchasing rules, and take the required steps to include small businesses.
Where the money goes today
Large regional awards often pay national consultancies and contractors to deliver the work. The award lands in the region and much of the spending leaves it. Local firms that could have done the work never appear in the proposal, so they never build the track record that would get them named next time.
An economic development organization sits in the best position to change that. It knows the local businesses, it convenes the universities, hospitals and governments that apply for large awards, and it can lead regional applications itself.
Build the consortium from local firms
Name local small businesses in the proposal. A regional application often needs engineering, training, software, construction or evaluation. A local firm with a clear role, a firm price and a letter of commitment can be named as a consortium member or subcontractor.
Pair them with credibility. A local company teamed with a regional university or hospital gives reviewers both execution ability and local presence.
Help them get named in other proposals too. Universities, hospitals and nonprofits in the region apply for grants that need what local firms sell. Introducing those firms before the proposals are written keeps more of that money at home.
Count the past performance. Every funded project a local firm delivers makes it a stronger partner for the next proposal, so each award compounds.
The rules
Choosing consortium members and subrecipients is a partnership decision, made when the proposal is assembled. Buying goods and services with the award is procurement, and it generally has to be competed.
The federal grant rules ask recipients to take steps to include small businesses (2 CFR 200.321). Those steps include putting them on solicitation lists and splitting large purchases so they can compete. The 2024 revision of those rules removed the general ban on local geographic preferences, but some programs keep their own restrictions, so read each program's terms. A firm that drafted the specifications for a purchase still cannot compete for it (2 CFR 200.319).
How Quillify helps
Quillify searches grants, government contracts and community lenders in one place, so an economic developer can see which programs could fund the region's priorities. It shows which funders already back organizations like the ones in the region, and drafts tailored proposals from each partner's own documents.
Quillify also runs the consortium. On a paid plan, the lead organization invites members by name or email, from an opportunity's suggested partners, or from the sub-recipients of a past federal award. It tracks each member's role and whether they have joined, and drafts the non-binding letters of intent and commitment on both sides, tracking each one until it is received. Members join from their invitation on any plan.
What you can do today
- Quillify for cities and regions
- How to get named as a subcontractor in grant proposals
- Cost share and matching funds
More in this series: How to use grants to grow your business: the grant partnership playbook, Which industries have the most grant funding?, How do you get named as a subcontractor in grant proposals?.
Start on the steps that are possible today.
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